Legal Principles and Key Points
- In the case of Malayan Credit Ltd v Jack Chia Mph Ltd AC 549 it was held that where joint tenants are commercial parties, property is presumed to be held in a tenancy in common in equity.
Facts of the Case
- The D was a tenant on the seventh floor of a building occupied it for business purpose.
- D and C agreed to share the premises and that a lease should be granted to both.
- The area to be occupied by each was calculated specifically and they agreed to the rent and service charge being apportioned in accordance with the area that they occupied.
- C went into occupation of 2,306 square feet which left D with 3,614 square feet.
- Before the lease was granted, D invoiced C in the same proportion for its share of the deposit payable to the landlord as security for due performance of their obligations under the lease and refundable on termination.
- The landlord executed a lease on the seventh floor and car park spaces to C and D as joint tenants at law and they took the lease to serve their separate commercial interests.
- They both paid the stamp duty and survey fees in the same unequal shares, and they continued to pay the rent and service charges in the agreed proportions.
- A dispute arose between them over the areas of occupation and C initiated proceedings in the High Court of Singapore seeking an order for the sale of the leasehold premises and equal division of the net proceeds of sale or alternatively equal partition.
- The judge held that C and D were tenants in common in equity in unequal shares and then dismissed the action.
- The Court of Appeal of Singapore allowed C’s appeal and ordered a sale of equal division of the net proceeds, holding that on severance of the joint tenancy, the tenants became tenants in common in equity in equal shares.
- D appealed to the Judicial Committee.
Issues in Malayan Credit Ltd v Jack Chia-Mph Ltd 1986 AC 549
- The issues in this case relate to whether the parties involved are beneficially entitled to the business premises as joint tenants in common in equal shares or as joint tenants in common in unequal shares.
Held by Privy Council (Singapore)
- Appeal allowed.
- The appeal was allowed.
- It was held that the situations in which in the absence of express agreement equity could presume joint tenants at law to be tenants in common in equity of the beneficial interest were not limited to a purchase in unequal shares, a load on mortgage advanced unequally or partnership property but included lessees taking a lease of premises for their own separate business purpose; that it could be inferred from all the circumstances that since the commencement of the lease, C and D held the beneficial interest as tenants in common equity in the unequal shares and therefore, the order for sale would be varied to provide that the net proceeds of sale should be divided accordingly.